Taxpayers affected by fires get more time to file

Originally published at The Ukiah Daily Journal
Originally written by Richard Bammer
Originally posted on 10/15/17, 6:20 PM PDT

The Franchise Tax Board on Friday announced special tax relief for California taxpayers affected by wildfires, granting an extension to file 2016 California tax returns and make payments until Jan. 31, 2018.

“Families affected by natural disasters need time to recover and rebuild their lives and homes,” said State Controller Betty T. Yee, who serves as chair of FTB in Sacramento. “We can alleviate one worry by offering extra time to file their taxes.”

The state’s taxing agency automatically follows federal postponement periods for any presidentially declared disasters, she noted in a press release.

Her decision came after the IRS, also on Friday, granted relief to individuals and businesses in seven counties: Mendocino, Sonoma, Napa, Lake, Butte, Nevada, and Yuba. This relief applies to various tax filing and payment deadlines that occurred starting on Oct. 8, 2017.

This includes:

Individual filers whose tax-filing extension runs out on Oct. 16, 2017. Because tax payments related to these 2016 returns were originally due on April 18, 2017, any payments associated with these filings are not eligible for this relief.

Yee also noted that disaster victims may receive free copies of state returns to replace lost or damaged ones. Taxpayers may complete Form FTB 3516, Request for Copy of Tax Return, and print the name of the disaster in red ink (for example, Tubbs Fire) at the top of the request.

Taxpayers may claim a deduction for disaster-related losses sustained in an area proclaimed by Gov. Jerry Brown to be in a state of emergency.

For a complete list of all disasters declared by the governor, see the “Qualified Disasters” chart on FTB’s Disaster Loss webpage. More information and instructions are available in FTB Pub. 1034, “How to Claim a State Tax Deduction for Your Disaster Loss.”

Disaster-loss rules apply to victims in governor-declared or presidentially-declared disaster areas. Taxpayers may claim a disaster loss in one of two ways: 1) They may either claim the disaster loss in the tax year that the disaster occurred, when they file their 2017 tax return next spring; or 2) taxpayers may claim the loss in the tax year before the disaster occurred by filing either an amended or original 2016 tax return. The advantage of claiming the disaster loss in the prior tax year is that the FTB can more quickly issue a refund, Yee noted in the prepared statement.

Taxpayers claiming the disaster loss should write the name of the disaster in red ink at the top of the tax return to alert FTB to speed up the refund. If taxpayers are e-filing, they should follow the software instructions to enter disaster information.

In addition, the FTB automatically follows announced federal postponement periods for hurricanes Harvey, Irma and Maria. Those affected taxpayers are granted an extension to file tax returns and make payments until Jan. 31, 2018. For instance, if Hurricane Harvey impacted a taxpayer who earns income in California, that taxpayer has extra time to file a California tax return.

On Sept. 26, the IRS issued a recap of special relief for taxpayers affected by the three hurricanes, extending the due dates for filing tax returns and paying taxes until Jan. 31, 2018.

A variety of other returns, payments and tax-related actions also qualify for additional time. See the disaster relief page on IRS.gov for details and offer relief the IRS has offered since these hurricanes began to make landfall in August.

The FTB will also follow these extended dates and will cancel interest and any late filing or late payment penalties that would otherwise apply, noted Yee.

The state taxing agency administers two of California’s major tax programs: personal income tax and the corporation tax.

For more information on other taxes and fees in California, visit taxes.ca.gov or the agency’s social media pages online.